County Seeking State Law That Allows It to Impose Pension Cuts

County officials in recent years have both touted their cooperative work with labor unions to rein in pension costs and criticized unions for pushing for the heightened benefit that has raised the costs of government.

Yet with a statewide election months away, the rhetoric between the two sides seems to be heating up again over the pension issue.

Over the past week, with publication of executive retirees making more than $100,000 a year on their pensions, the debate went red hot.

County CEO Tom Mauk said officials are trying to get Sacramento to change state law so that local governments can simply impose pension contribution changes just like they can with wages and other benefits. Current law forbids any imposed changes to pensions at the negotiating table.

While the county is working on a new tier of benefits for new hires, Mauk said it’s necessary to find other incremental ways to lower annual payments and keep pressure off the budget.

The county’s unfunded liability for Orange County’s retirement system now hovers above the $3 billion mark, and annual payments are spiking because of sustained investment losses. With little ability to change the unfunded liability or Wall Street, county leaders are left with one main option: getting employees to pay more for their pensions.

“You can’t impose that in impasse,” said Mauk. “And I invited [Orange County Employees Association General Manager] Nick [Berardino] in Sacramento to change that law.”

Berardino — pointing to the publication of the $100,000 executive manager and department head retiree club — said don’t expect rank and file employees to do anything else on pensions until the top tier steps up and accepts changes to their retirement plans.

“We’re not engaging on any more changes until everybody is on a level playing field,” Berardino said.